ITV Digital was a British digital terrestrial televisionbroadcaster, which launched a pay-TV service on the world's first digital terrestrial television network. Its main shareholders were Carlton Communications and Granada plc, two franchises of the ITV network. Starting as ONdigital in 1998, the service was re-branded as ITV Digital in July 2001. Low audience figures and an ultimately unaffordable multi-million pound deal with the Football League led to the broadcaster suffering massive losses and force entering administration in March 2002. The service ceased permanently in June 2002, with the terrestrial multiplexes subsequently taken over by Crown Castle and the BBC to create Freeview in October 2002.

Digital terrestrial television (DTT) began in the United Kingdom in 1998. Six multiplexes were set up, with three of them allocated to the existing analogue broadcasters. The other three multiplexes were auctioned off. A consortium of Carlton Television, Granada Television and British Sky Broadcasting won the auction as British Digital Broadcasting (BDB). The brand ONdigital was adopted for launch. BSkyB was forced by the Independent Television Commission (ITC) to withdraw from the consortium on competition grounds; this effectively placed Sky in direct competition with the newly launched service (although BSkyB was still required to provide key channels such as Sky Movies and Sky Sports to the service).[1] With Sky originally part of the consortium, ONdigital would have paid discounted rates to carry Sky's television channels. Instead, with their positioning as a competitor, Sky charged the full market rates for the channels, at an extra cost of around £60million a year to ONdigital.[2] In all ONdigital was given one year from the award of the licence to launch the first DTT service. In addition to launching audio and video services, they also led the specification of an industry-wide advanced interactive engine (based on MHEG-5). This was an open standard that was then used by all broadcasters on DTT.

The new digital broadcaster was launched on 15 November 1998, with a lineup of 18 channels, including many channels developed in-house by Carlton and Granada.[3] On 7 March 2000, Onmail was launched,[4] followed closely on 18 September 2000, by ONdigital text service ONnet,[5] and in the same year a deal with multiplex operator SDN led to the launch of pay-per-view service ONrequest.

From the launch date, however, the service was quickly losing money. Aggressive marketing by BSkyB for their own digital service, Sky Digital, made the ONdigital offer look unattractive. The new digital satellite service provided a dish, Digibox, installation and around 200 channels for £159, a lower price than ONdigital at £199. ONdigital's subscription pricing had been set to compare with the older Sky analogue service of 20 channels.

ONdigital's growth slowed throughout 2000 and by the start of 2001, the number of subscribers did not increase - meanwhile, its competitor Sky Digital was growing.[citation needed] The ONdigital management team hoped to obtain the upper hand by a series of 'free set top box' promotions (initially at retailers such as Currys and Dixons) when ONdigital receiving equipment was purchased at the same time as a television set or similarly priced piece of equipment. These offers eventually became permanent, with the set-top box 'loaned' to the customer at no charge for as long as they continued to subscribe to ONdigital. The offer was matched by Sky. ONdigital's churn rate, a measure of the number of subscribers leaving the service, reached 28% during 2001.[6]

British Digital Broadcasting logo (1997–1998)

Additional problems for ONdigital were caused by the choice of 64QAM broadcast mode, coupled with far weaker than expected broadcast power, (meaning that the signal was weak in many areas), a complex pricing structure (comprising many menu options), a poor quality subscriber management system (badly adapted from Canal+), a paper magazine TV guide whereas BSkyB had provided an electronic programme guide (EPG), insufficient technical customer services, and much signal piracy. While there was a limited return path provided via an in-built 2400 baud modem, there was no requirement (as with BSkyB) to connect the set-top box's modem to a phone line.

Later problems occurred when ONdigital began to sell 'ONprepaid', a set-top box bundle sold in high street stores and supermarkets at a price that included - in theory - the set-top box on loan and the first year's subscription package. Thousands of these packages were also sold at well below retail price on auction sites such as the then-popular QXL. As the call to activate the viewing card did not require any bank details, many ONdigital boxes which were technically on loan were at unverifiable addresses. This was later changed so a customer could not walk away with a box without ONdigital verifying their address. Many customers did not activate the viewing card at all, although where the viewer's address was known, ONdigital would write informing them that they must activate before a certain deadline.[citation needed]

Additionally, the OnDigital pay-per-view channels had been encrypted using a system - SECAMediaGuard - which had been subsequently cracked. ITV Digital did not update this system, therefore it was very easy for people to produce and sell counterfeit subscription cards which would give access to all the channels.[7] In 2002, Canal+ accused News Corp of extracting the UserROM code from the MediaGuard cards and leaking it onto the internet.[8] Canal+ brought a lawsuit against News Corporation alleging that they, with the help of NDS, had been working on breaking the MediaGuard smartcards used by Canal+, ITV Digital and other non-Murdoch-owned TV companies throughout Europe.[9][10] The action was later partially dropped after News Corporation agreed to buy Canal Plus's struggling Italian operation Telepiu.[11][12] Other legal action by Echostar/NagraStar was being pursued as late as August 2005 accusing NDS of the same wrongdoing.[13] In 2008, NDS was found to have broken piracy laws by hacking EchoStar Communications’ smart card system, however only $1,500 in statutory damages were awarded.[14]

On 11 July 2001 Carlton and Granada rebranded ONdigital as ITV Digital.[15] They also purchased the TV rights to the Football League and launched the ITV Sport Channel. A re-branding campaign was launched to support the new naming, with customers even being sent ITV Digital stickers to place over the existing ONdigital logos on their remote controls and set top boxes. The software running on the receivers was not changed though, and always displayed 'ON' on nearly every screen.[16] A plan to change the onscreen software was planned along with a change to a stronger encryption system in Autumn 2002,[citation needed] however this never arose due to liquidation. The rebrand was not without controversy as SMG plc (owner of Scottish Television and Grampian Television), UTV and Channel Television all pointed out that the ITV brand did not belong solely to Carlton and Granada. SMG and UTV initially refused to carry the advertising campaign for ITV Digital and did not allow the ITV Sports Channel space on their multiplex, meaning that it was not available at launch in most of Scotland and Northern Ireland. The case was resolved in Scotland,[17] and the Channel Islands and later still in Northern Ireland, allowing the ITV Sport Channel to launch in the non-Carlton and Granada regions (although it was never made available in the Channel Islands, as the islands do not have DTT or Cable and it never appeared on Sky Digital).

ITV Digital also ran an advertising campaign involving the comedianJohnny Vegas as Al and a knitted monkey simply called Monkey (voiced by Ben Miller). A knitted replica of Monkey could be obtained by signing up to ITV Digital. Because the monkey could not be obtained without signing up to the service, a popular market for second-hand monkeys developed. At one time, original ITV Digital Monkeys were fetching several hundred pounds on eBay,[18] and even knitting patterns delivered by email were sold for several pounds. The campaign was created by the advertising agency Mother.[19] In early 2007, Monkey and Al reappeared in an advert for PG Tips tea, which included a reference to ITV Digital's downfall.

ITV Digital was placed into administration on 27 March 2002, after the Football League refused to accept a £130m pay cut in its £315m deal with the ITV Sport Channel. Most subscription channels ceased broadcasting on ITV Digital on 1 May 2002. The collapse on 30 June 2002 caused financial difficulties for lower-division football clubs who had budgeted for large incomes from the television contract. The Football League sued ITV Digital's parent companies, Carlton and Granada, claiming that the firms had breached their contract in failing to deliver the guaranteed income. And so, by the end of June 2002, the service ceased. The League lost the case, with the judge ruling that it had "failed to extract sufficient written guarantees". The League then filed a negligence claim against its lawyers for failing to press for a written guarantee at the time of the deal with ITV Digital. This time it was awarded a paltry £4 in damages of the £150m it was seeking.[20]

A consortium made up of the BBC, BSkyB and Crown Castle International was granted ITV Digital's old broadcasting licence, and launched the Freeview service on 30 October 2002, offering 30 free-to-air TV channels and 20 free-to-air radio channels including several interactive channels such as BBCi and Teletext but no subscription or premium services. Those followed on 31 March 2004 when Top Up TV began broadcasting eleven pay TV channels in timeshared broadcast slots.

During 2002, ITV Digital's liquidators started to ask customers to return set top boxes or pay a £39.99 fee. Had this been successful it could have threatened to undermine the fledgling Freeview service, since at the time most digital terrestrial receivers were former ONdigital and ITV Digital units. Carlton and Granada stepped in and paid £2.8m to have the boxes stay with their customers, as at the time the ITV companies received a discount on their licence payments based on the number of digital homes they had converted.

Following the administration in 2002, the three multiplexes that were run by ITV Digital remained blank until a week or so before Freeview's launch.

This is a list of ex-ITV and ONdigital set-top boxes. All boxes used similar software, in that a unified interface and design was used between all models. Top Up TV provided a small update in 2004 which upgraded minor technicalities with encryption services.

All these set top boxes (and some ONdigital branded IDTVs) become obsolete after the digital switchover (DSO), as post-DSO broadcasts utilise a newer 8k modulation scheme with which this earlier equipment is not compatible.